In a mixing bowl, cream together the softened butter and powdered sugar until light and fluffy.

Add the vanilla extract and mix until combined.

Gradually add the sifted flour and mix until just combined.

Fold in the chopped pistachios until evenly distributed.

Preheat the oven to 350°F (175°C) and line a baking sheet with parchment paper.

Turn the dough out onto a lightly floured surface and roll it out to about 1/4 inch thick.

Use a cookie cutter to cut out shapes and place them on the prepared baking sheet.

Bake in the preheated oven for 20-25 minutes or until the edges are lightly golden.

Remove from the oven and let cool on the baking sheet for a few minutes before transferring to a wire rack to cool completely.